United States: California Supreme Court Invalidates "New Project" Test

Amanda Monchamp is a partner and Joanna "Joey" Meldrum is an associate in Holland & Knight's San Francisco office

HIGHLIGHTS:

  • In Friends of the College of San Mateo Gardens v. San Mateo Community College District, the Supreme Court of California affirmed that addenda can appropriately be used to consider modifications to a previously approved negative declaration or Environmental Impact Report (EIR).
  • The court's decision that the California Environmental Quality Act (CEQA) allows use of prior CEQA documents will help strengthen the defensibility of addenda and negative declarations for agency approvals that implement plans and projects that have already gone through one or more earlier rounds of CEQA review.

In a major win for agencies and project sponsors, the Supreme Court of California affirmed that addenda can appropriately be used to consider modifications to a previously approved negative declaration or Environmental Impact Report (EIR). See Friends of the College of San Mateo Gardens v. San Mateo Community College District, No. S214061 (Cal. Sept. 19, 2016). In the recent case, the San Mateo Community College District had approved a campus master plan based on a Mitigated Negative Declaration (MND) and proposed to modify a portion of the plan relating to the demolition and remodeling of three buildings, as well as associated landscaping and parking facilities. The court concluded that the plan change for this project-level MND was appropriately considered with an addendum and that the project modification was not a "new project" under the California Environmental Quality Act (CEQA). It also concluded that the substantial evidence test applied to whether the modification triggered the need for a new environmental document under CEQA Section 21166 and Guidelines Section 15162.

Court Rejects "New Project" Test

The court rejected the abstract "new project" test, strongly criticizing Save Our Neighborhood v. Lishman (2006) 140 Cal.App.4th 1288 and favorably citing Mani Brothers Real Estate Group v. City of Los Angeles (2007) 153 Cal.App.4th 1385. The court held that "for the purposes of determining whether an agency may proceed under CEQA's subsequent review provisions, the question is not whether an agency's proposed changes render a project new in an abstract sense." Slip op. at 13-14. Instead, the court emphasized that "[a] decision to proceed under CEQA's subsequent review provisions must thus necessarily rest on a determination – whether implicit or explicit – that the original environmental document retains some informational value." Slip op. at 13. "But whether an initial environmental document remains relevant despite changed plans or circumstances – like the question whether an initial environmental document requires major revisions due to changed plans or circumstances – is a predominantly factual question. It is thus a question for the agency to answer in the first instance, drawing on its particular expertise." Slip op. at 15-16. Justice Leondra R. Kruger noted that this exposed the "error in treating the new project inquiry as a question for the court's independent determination under a de novo standard." Slip op. at 15.

The court further expressed that "we expect occasions when a court finds no substantial evidence to support an agency's decision to proceed under CEQA's subsequent review provisions will be rare, and rightly so; "a court should tread with extraordinary care" before reversing an agency's determination, whether implicit or explicit, that its initial environmental document retains some relevance to the decisionmaking process." Slip op. at 16 (citing Moss v. County of Humboldt (2008) 162 Cal.App.4th 1041, 1052, fn. 6.).

Court Upholds CEQA Guidelines Section 15162 and Application of Substantial Evidence Standard to MNDs

The court affirmed the validity of CEQA Guidelines Section 15162 and gave "great weight" to the CEQA Guidelines. Slip op. at 18-21. After a lengthy review of the legislative history, the court rejected the petitioner's argument and recognized that "by extending the predecessor to CEQA Guidelines section 15162 to projects initially approved by negative declaration," the California Natural Resources Agency appropriately filled a gap in the CEQA statutory scheme. Slip op. at 19-20. Kruger explained that "[l]imiting agencies' post approval review obligation for projects that were initially approved via negative declaration is wholly consistent with a statutory scheme in which negative declarations, no less than EIRs, are entitled to a presumption of finality once adopted." Slip op. at 20. The court noted that the presumption of finality "appl[ies] with even greater force in a case such as this, in which the project initially raised so few environmental questions that an EIR was not required, but a negative declaration was found to satisfy the environmental review requirements of CEQA." Slip op. at. 21. The court also explained that under CEQA Guidelines Section 15162, the proper inquiry is whether there is "substantial evidence that the proposed modifications will involve "[s]ubstantial changes" that "require major revisions of the previous EIR or negative declaration due to the involvement" of new or significantly more severe environmental effects." Slip op. at 22 (citing CEQA Guidelines, §15162, subd. (a); see id., §15384 [defining "substantial evidence"]). See also Slip op. at 3, fn 6.

Practical Implications of the Decision

Because many projects have already been analyzed in one or more earlier CEQA documents, the court's endorsement of the general principle that CEQA allows use of prior CEQA documents will help strengthen the defensibility of addenda and negative declarations for agency approvals that implement plans and projects that have already gone through one or more earlier rounds of CEQA review. Previously approved CEQA documents that should be considered for this compliance track include those approved by a local lead agency (e.g., plan-level CEQA documents like General Plans, community and mobility plans, zoning and historic preservation ordinances and redevelopment plans, as well as project-level documents prepared for the project site itself) and prior CEQA documents approved by regional agencies such as Regional Transportation Plans/Sustainable Communities Strategies and Natural Community Conservation Plans.

In this particular case, the court remanded to the Court of Appeal for consideration of the adequacy of the addendum and a legal issue regarding public review of addenda, which was not addressed in the courts below. Thus, despite more than five years of litigation, the case is still far from over and the San Mateo Community College District still cannot improve its facilities to better serve its students.

The San Mateo Community College District retained Holland & Knight in its defense of the case.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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